Real Estate in Iceland

According to the United Nations, Iceland ranks as the third best country in the world when it comes to the quality of life. Aside from having a temperate climate - windy winters and cool summers - which is ideal for retirees, it also has a highly-modernised society that attracts young expat professionals.

Iceland boasts an advanced technology and a top-notch education system that are testaments to its status as an excellent expat destination. Some expats planning on moving to Iceland travel ahead of time for the sole purpose of finding an accommodation since securing a property, whether for purchase or long-term rental, can be a tough task. The situation is less challenging for travellers who are staying for a short period because guesthouses and youth hostels are practically all over the area.

Buying a Property

You should know that 80% of Iceland’s properties are privately owned which means that the people in the country choose to buy instead of rent. Because of the growing demand and insufficient supply in the housing market, expats should expect that the rental cost is a bit high. EU and EEA citizens are allowed to purchase a property in Iceland without the permit of the Ministry of Justice while non-EU, and EEA nationals must have domicile in the country plus permission to purchase from the minister. The average selling prices of an apartment in Iceland are as follows:

Price per square metre in the city centre – USD 3,450

Price per square metre outside the city centre – USD 2,460

Renting

Foreigners on a longer-term stay may opt for rental apartments outside the capital. Reykjavik has a limited rental market which is why the rental rates are higher than any other area. Travellers on a budget may also consider youth hostels, the cheapest and most practical option. Some of the popular youth hostels in Reykjavik, the capital are:

Farfuglahemilio

Address: Sundlaugavegur 34, 105 Reykjavik, Iceland

Telephone: (354) 553 8110

Reykjavik Hostel Village

Address: Flokagata 1, 105 Reykjavik, Iceland

Telephone: (354) 778 88307

The cost of living in the country is exceptionally high, particularly the price of food, clothing and alcohol. Expats may seek for financial assistance from the government. Tenants of rented flats or apartments may apply for a rent subsidy at the Social Service Office or through the local municipality. The support applies to renters aged 18 and above and is currently signed to a 6-month lease contract. However, it excludes those in accommodation with communal kitchen and bathroom. The subsidy is only applicable to residential housing and may be renewed every year. Though the rent subsidy is exempted from income tax, it must be declared on the tax return.

Choosing a City

Reykjavik

A majority of expats in Iceland are residing in the capital, Reykjavik, where you will find most of the bars and nightclubs in the country. It is also a convenient place to live in if you are going to work on Reykjavik’s business hub. With just about 200,000 residents, this capital has everything there is to offer such as lively nightlife, cafés, restaurants, colourful houses, safe and vibrant streets as well as breathtaking outdoor sceneries that were used as filming locations for the popular TV series ‘Game of Thrones’.

One-bedroom apartment (city centre) – USD 1,450

One-bedroom apartment (outside the city centre) – USD 1,000

Three-bedroom apartment (city centre) – USD 2,360

Three-bedroom apartment (outside the city centre) – USD 1,850

Hafnarfjorour

Another good option is Hafnarfjorour, Iceland’s third largest city. It has a peaceful environment and several prominent educational institutions which make it a considerable neighbourhood for your family. Local authorities are also known for implementing a 24-hour internet access anywhere you are in the city, which means that residents can practically do anything online.

One-bedroom apartment (city centre) – USD 1,100

One-bedroom apartment (outside the city centre) – USD 1,000

Three-bedroom apartment (city centre) – USD 2,000

Three-bedroom apartment (outside the city centre) – USD 1,000

Finding an Accommodation

Expats may find properties through the following channels:

Newspaper advertisements – Placing an ad in a local newspaper would be helpful since they only charge small fees.

Surf the internet – Most of the available house rentals in Iceland have their own websites with all necessary the information. Some sites provide a comparison between the rates and amenities.

Rental agencies – a top rental agency is Leigulistinn, which provides customers with updated listings of all available properties for rent for a minimal monthly fee